Maersk Seeks Port Expansion in Kenya & Nigeria

Shipping company A.P. Moeller-Maersk is expanding operations in Africa, by seeking contracts to upgrade ports in Nigeria and Kenya

According to the company senior vice-president for Africa Lars Reno Jakobsen, Maersk is awaiting a final sign-off on a contract to help build a new port in Badagry, located in Nigeria’s southern Lagos state. Once finalised, the project could be worth more than US$2bn in terms of investment.

“Hopefully, we can start some time this year. It will provide capacity, not only for containers, but also for oil, break-bulk and offshore,” said Jakobsen.

The Danish shipping giant has a presence in more than 40 African nations and generates about 10 per cent of its sales in and around the continent. The company’s sales in Africa have also been growing at a steady rate between five and six per cent every year. Besides its shipping business, the Copenhagen-based company supplies oil- and gas-related services. The company’s APM Terminals unit operates 10 West African ports.

At the World Economic Forum for Africa 2015, Maersk officials revealed that they are now actively pursuing East Africa for opportunities; there is an ongoing tender process for the Kenyan port of Mombasa where APM Terminals has shown interest in operating two new berths.

In addition, the company is also working on a US$1bn expansion of Ghana’s Tema port in collaboration with the West African nation’s ports authority. The project includes the construction of four new berths and will more than quadruple the port’s capacity.

Maersk has always retained its position in the continent, and has struck big port deals in the past. In 2013, Maersk partnered with Bollore SA and Bouygues SA to win a US$500mn contract to build a second container terminal in Abidjan, Côte d’Ivoire.

As Africa is moving towards the imports of electronic goods and raw materials, shipments of agricultural products, textiles and clothing are rising. Jakobsen stated that the continent is moving up the value chain, which is providing a boost to the shipping sector.